TMI Blog1986 (3) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ng section which provides that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods at the rates set forth in the First Schedule. Artificial or synthetic resins and plastic materials , which in common parlance are called polyester chips , appear at Item No. 15A of the First Schedule and attract 50 per cent ad valorem as the rate of duty. Sections 6, 12 and 37 of the Excise Act empower the Central Government to frame rules and Rule 8 of the Central Excise Rules, 1944, framed thereunder empowers the Central Government to exempt by Notification in the Official Gazette and subject to such conditions as may be specified in the Notification any excisable goods from the whole or any part of duty leviable on such goods. In exercise of this power, the Central Government issued a Notification No. 38/73-Cus., dated 1-3-1973 exempting polyester polymer chips from the whole of the duty of excise leviable thereon unconditionally. The Notification contains three more items like Cellulose acetate, Polyamide chips, Acrylic sheets and acrylic plastic bangle tubles, etc., for which unlike the item of polyester polymer chips the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by them in the manufacture of polyester films, were enjoying exemption from duty vide Notification dated 1-3-1973 and the film manufactured by them was enjoying the exemption available to it under the Notification dated 23-10-1982 before the amendment of 25th June, 1983. The Petitioner company made a grievance that in view of the amending Notification dated 25-6-1983, the exemption which they were enjoying will no longer be available to their film. The Petitioner company requested the Government that they may either be given the option of not availing of the exemption from excise duty notified under the Notification dated 1-3-1973 or that polyester chips used in manufacture of polyester films should be excluded from the purview of the second Notification to enable the film manufactured by the company from such polyester chips to continue to avail of the exemption. This was followed by another letter of 2lst July, 1983 to the Assistant Collector, Central Excise, Aurangabad, in which the Petitioner company referred to the amended Notification No. 171/83 dated 25-6-1983, and informed the Assistant Collector that the said Notification obviously gives an option to avail of or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 19th January, 1984 in which a demand of Rs. 43,61,769.68 was made against the company as respects polyester film manufactured during the period 1-10-1983 to 16-11-1983 out of C.V.D. paid imported raw material. Immediately after receipt of the second show cause notice, the Petitioner company filed the present writ petition on 1-2-1984. 7. On 4-2-1984, an interim stay in terms of prayer Clause (d), that is to say, from taking any steps in furtherance to the show cause notices dated 17th December, 1983 and 19th January, 1984, was granted. On 27-2-1985, the Petitioner company furnished a bank guarantee for Rs. 80,00,000.00. 8. The Excise Act is a complete code relating to the central duties of excise on goods manufactured or produced in the country and separate Chapters in the Act deal with adjudication, confiscations, penalties and appeals to the Departmental Collector as well as to the Appellate Tribunal. By the present writ petition filed immediately after receipt of the two show cause notices but without showing cause as required by the notices, the Petitioner seeks writs of prohibition and certiorari to quash and set aside the two show cause notices. 9. A writ of prohibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo show cause notices. The wording of the second proviso of the Notification dated 25th June, 1983, namely, and such exemption has been availed of -argued Counsel-shows that this Notification itself gives an option to the assessee as to whether he should or should not avail of the exemption granted by the earlier Notification on polyester chips the second alternative entitling him to avail of the exemption on the finished products, namely, polyester films. According to Revenue, no such right of election has been given by the second Notification. Section 3 of the Customs Tariff Act is the charging section regarding additional duty on an article which is imported into India, namely, which will be equal to the excise duty for the time being, leviable on a like article if produced or manufactured in India. The Explanation to section 3 of the Customs Tariff Act makes it clear that if the article is not so manufactured in India, then the duty would be leviable on the class or description of articles to which the imported article belongs. After making a reference to the Notification dated 1-3-1973, Revenue argues that when polyester polymer chips have been exempted from the whole of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, AIR 1974 S.C. 348,, is to tell the true facts to the officer and it will then be for that officer to ascertain the true nature of the transactions. 13. The Petitioner has not been able to canvass at the Bar that the show cause notices ex facie or read in the context of the other plethora of admitted facts point out to one and only one conclusion, namely, that the Petitioner has been granted a right to avail of or not to avail of the exemption granted by the earlier Notifications and hence the show cause notices should be quashed. The matter will have-to be gone into in depth : the details of the goods manufactured, the correspondence entered into by the Petitioner with the Government and the Collectorate, the practice of issuing exemptions under section 25 (1) of the Customs Act and the propriety of conferring an option by delegated legislation on an assessee to elect between two rates of taxes needs a detailed examination.. Writ jurisdiction would hardly be a substitute for the hierarchical statutory remedies provided in the Act-more so when there is not even a first determination about the liability of the Petitioner by the officer in the lowest category. If the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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